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OEE: overall equipment effectiveness, formula and example

OEE = Availability × Performance × Quality. It shows what share of planned time the equipment actually turns into good output at nominal speed and makes the “six big losses” visible.

What the metric measures

The effectiveness of a specific line/machine in terms of time, speed, and quality. It lets you compare shifts/lines, focus on the main types of losses, and justify TPM/SMED improvements.

Calculation

  • OEE = Availability × Performance × Quality
  • Availability = Run time / Planned production time
  • Performance = (Ideal cycle time × Output) / Run time
  • Quality = Good units / Output
  • Derived metrics: OOE (based on available time), TEEP (based on 24/7 calendar time)

Agree on policies: what is included in planned time, how micro-stops are recorded, rework rules, and the reference ideal cycle time.

Calculation example

A shift is 480 min with 60 min of downtime: availability = 420 / 480 = 87.5%. In 420 min 840 parts should have been made, 714 were: performance = 85%. Of 714, 700 are good: quality = 98%. OEE = 0.875 × 0.85 × 0.98 = 72.9%.

Data sources

MES/SCADA/PLC (states, cycles), ERP/1C (plan/actual, standards), CMMS (repairs, MTBF/MTTR), quality systems (FPY/scrap), counters and speed sensors.

Interpretation

  • Availability↓ — breakdowns, long setups, waiting for materials or QA
  • Performance↓ — reduced speed, micro-stops, tooling/operating modes
  • Quality↓ — startup/process defects, materials, calibration
  • Tools: TPM, SMED, standard work, first-piece inspection

Useful breakdowns

  • Line / machine / work area; shift / crew
  • SKU / recipe / tooling
  • Downtime types: breakdown, setup, waiting, QA hold
  • Startup vs steady state; micro- vs major stops

Dashboard visualizations

  • Time waterfall: calendar → planned → run time → effective output
  • Pareto of losses across the “six big losses”
  • Trend of OEE and its A/P/Q components by shift/line
  • Micro-stop heatmap; speed vs reference chart
  • MTBF/MTTR and defect map (FPY, defect types)

How to set targets

Define the reference ideal cycle time and accounting rules. Set targets for A/P/Q, pick the top 3 losses using Pareto, introduce daily plan-vs-actual reviews and corrective actions, and align with TPM and SMED.

Common mistakes

  • Mixing planned and calendar time; a theoretical “ideal cycle time”
  • Unrecorded micro-stops; rework counted as good
  • Double counting of downtime; incorrect counters
  • Policies not aligned across lines/shifts

Questions for discussion

  • What is the biggest loss and its potential in pp of OEE?
  • What effect would −30% setup at the bottleneck have?
  • Where are the quick “speed losses,” and how can they be stabilized?
  • What is the FPY target at the start of a shift, and how can it be achieved?

Questions and answers

What is OEE?

Overall Equipment Effectiveness — the share of planned time during which equipment really produced good products at its rated speed.

How do you calculate OEE?

OEE = availability × performance × quality, where availability is the share of time running, performance is actual versus rated speed and quality is the share of good output.

What OEE level is good?

About 85% is considered world class, 60–75% is typical for many plants. The key is to know which component drags the figure down.